Bailment




In common law, bailment refers to a contractual transfer of assets or property from a bailor to a bailee where the bailor temporarily relinquishes possession and not ownership of the property. It describes a legal relationship where a personal property’s physical possession is transferred from one person to another who later takes possession but not total ownership as such.
Bailment, in finance, means legitimate transfer of securities like shares of stock from one individual (owner) to another for short selling. Here, short selling means an investment or trading strategy where people bet on a decline in the price of securities.
An example of bailment is a leased apartment where a tenant possesses and uses the apartment but in reality he does not own it.
There are three types of bailments:
a.       A bailment which benefits both the bailor and bailee
b.       A bailment that benefits only the bailor
c.       A bailment that benefits only the bailee


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